Expecting another refund after the IRS calculates the $10,200 unemployment tax break? You might want to amend your return to maximize other credits

The Internal Revenue Service says it will automatically adjust tax returns and issue extra refunds for people who already filed their taxes before a valuable jobless benefit tax break came along in March.

The IRS says it doesn’t require taxpayers to send in amended returns under the circumstances. Those payments will start going out in May and taxpayers could pocket $, due to the recalculations, according to some estimates.

But before sitting back and letting the IRS do the work, experts say some people should at least consider filing an amended return — that way, they can bring in more money they’ve suddenly become eligible for through the readjustment.

“It’s definitely worth just double checking,” said Christine Speidel, a professor and director of the Villanova University Charles Widger School of Law’s Federal Tax Clinic. In certain cases, some people could hypothetically rake in around $2,000, to $3,000, extra, based on Speidel’s calculations.

Jobless benefits are taxable income, but the American Rescue Plan contained a provision saying the feds would not assess income tax on the first $10,200, a person received in jobless benefits. The income-tax exclusion is $20,400, for a married-couple filing jointly.

Around the time President Joe Biden signed the plan, millions of households already submitted returns, IRS statistics show.

Though the IRS said it would automatically adjust returns based on the exclusion, it said it would not tweak the returns to apply for new tax credits if the underlying return didn’t already seek those credits.

Anyone who wants to access those credits based on their newly-reduced adjusted gross income will have to file an amended income tax return, the federal tax collection agency said.

Author: jttax.net

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